Low Rates now through 2014

Chalk another year up for those of us who like Agency Reits.  We already knew that the Fed was going to hold interest rates near zero until late 2013, now we know the current rates are good for three more years. Think about that for a moment for those who have concerns about all the uncertainties regarding Obamacare, federal regulations, new Dodd Frank issues, or anything Obama might throw at you or your business, the fact is you now can count on one thing being good for a three years. 

We have been following the Federal Reserve for over three decades now and never in our wildest imagination would we expect them to come right out and put in writing that there will be no rate increases for three years. Lots of issues to be addressed if you are investing in your private business or your considering putting some money at risk in the bond or stock market, but having stable interest rates helps one category of stocks more than any other Agency Reits. 

It also makes for good corporate expense savings as bonds mature corporations are locking in low rates for years to come. 

This news will make us reconsider our dropping of HTS from our portfolio and adding to our already sizable position in Agency Reits. One can not lose when getting 14% or so on your investment for three years virtually guaranteed. 

We own options on AGNC currently and will now look to add to our position either by adding to AGNC or picking up HTS.